question_answer

Anu and Menu are two friends. Anu claims that Joint Hindu family business is also like partnership but the difference is partners are members of same family. Menu claims it to be false and says that there are many other differences.

(a) Who of the two is right?

(b) Clarify the difference between partnership ad joint Hindu family business, if any.

Answer:

Ans.     (a) Menu is right. There are many differences in two.

(b) Difference between Joint Hindu Family System and partnership is given below:

(i) Regulating law: A partnership is governed by the provisions of the Indian Partnership Act, 1932. A joint Hindu family business is governed by the principles of Hindu law.

(ii) Mode of creation: A partnership arises out of a contract, whereas a joint Hindu family business arises by the operation of law and is not the result of a contract.

(iii) Admission of new members: In a partnership no new partner is admitted without the consent of all the partners, while in the case of a joint Hindu family firm a new member is admitted just by birth.

(iv) The position of females: In a partnership women can be full-fledged partners, while in a joint Hindu family business membership is restricted to male members only. After the passage of the Hindu Succession Act, 1956, females get only co-sharer's interest at the death of a coparcener and they do not become coparceners themselves.

(v) Number of members: In partnership the maximum limit of partners is 10 for banking business and 20 for any other business but there is no such maximum limit of members in the case of joint Hindu family business.

(vi) Liability of members: In partnership, the liability of the partners is joint and several as well as unlimited. In other words, each partner is personally and jointly liable to an unlimited extent and if partnership liabilities cannot be fully discharged out of the partnership property each partner's separate personal property is liable for the debts of the firm. In a joint Hindu family business only the 'Karta' is personally liable to an unlimited extent, i.e., his self-acquired or other separate property besides his share in the joint family property is liable, for debts contracted on behalf of the family business.